Fund Objective

The aim of the Fund is to achieve capital growth.

View on Past Performance

European equities fell sharply in September, in tandem with other markets, as the problems afflicting the financial sector developed into a major crisis. Overall, the FTSE World Europe ex UK Index fell by just over 11%.Our overweight in healthcare was a positive, but stock selection made the biggest contribution to performance. Key contributors included the insurance companies Prudential and RSA. Not owning the steelmaker ArcelorMittal, which suffered from concern about the global economy, also added value. However, another holding, Rio Tinto, was a victim of falling commodity prices.We bought high quality banking stock Lloyds TSB, reducing what has been a successful underweight. We also invested in Daimler, which has an excellent brand and is the best positioned player in a weak sector. We sold Prudential after a strong performance relative to its peers.

Future Expectations

We are now more concerned about the problems afflicting the financial sector - and the prospect of a slowing economy and rising unemployment - than we are about inflation, which may already have peaked. Equities offer attractive value, but we remain cautious on markets in the short term and the fund is defensively positioned.

Fund Details